Marathon, Portage and Wood Counties make up the Central Wisconsin region for the purposes of this report. Tables 2-6 give evidence on the performance of the regional economy by providing information on overall employment, employment by sector and industry, and the expectations of corporate executives. "

     The unemployment rate (seasonally unadjusted) can be seen for each Central Wisconsin county, Wisconsin and the nation in Table 2. The regional unemployment rate has dropped significantly since June of 1983, falling from 9.8% to 8.3%. However, the state and the nation have both eased considerably more over the past year, registering June rates of 7.1% and 7.4% respectively. Marathon County continues to post the highest unemployment rate in the region at 8.7%. This is primarily due to the severity of the 1981-82 recession in the county. The region's comparatively high unemployment rate indicates that labor markets are not yet tight. Partially accounting for this relative slack in the regional labor market is the fact that Central Wisconsin employment is highly sensitive to seasonal patterns because of the important agriculture and tourism industries. The implication is that regional un­employment declines are likely to be more pronounced than those occurring in the state and nation in the coming months.

     Turning to employment changes (Table 3), Central Wisconsin stacks up better against the state and national figures. Economic expansion has clearly prevailed in the region over the past year, with payrolls rising 5.4%. Comparable Wisconsin and U.S. figures read 3.4% and 4.9% respectively. The surprisingly low figure for the state indicates that the expansion has not been as strong as declines in the unemployment rate would suggest. On the other hand, the opposite holds true for Central Wisconsin; the region has been providing jobs at a healthy pace over the past year.

     Breaking regional employment changes into major sectors indicates that the expansion is broad based (Table 4). Solid gains show up in trade, services and construction. The rise in manufacturing employment is far more moderate than registered in the two preceding reports. This is a sign of a maturing expansion. Manufacturing tends to lead economic activity in the early stages of an upswing. As the expansion develops, the less volatile service and trade sectors begin adding to payrolls. The Central Wisconsin expansion has now entered this second phase.

     Two of Central Wisconsin's key industries have added no new jobs in the past year (Table 5). The food processing industry, slowed by layoffs in Portage County and the stable financial services industry remain essentially even with year earlier employment levels. Lumber and wood products continue to stand out among major Central Wisconsin industries. The industry added 700 jobs in the second quarter. The paper products industry has also contributed substantially to employment in the expansion. However, second quarter em­ployment gains in paper production were slight.

     Expectations of executives at Central Wisconsin's major firms shows a clear downward trend from the March 1984 level (Table 6). This is not surprising. Corporate executives, having witnessed many business cycles, are well aware that the first quarter 1984 pace could not be maintained over any appreciable period. The magnitude of the decline in the index value is somewhat disturbing, however. Business executives perceive recent national and local conditions as improving but at a much slower rate than three months earlier. Expecta­tions of future national and local conditions are also well below the March level but remain mildly positive. Finally, the largest drop occurred in expectations of industry conditions. This category declined from a heady 84 to an index reading of 62, a level consistent with national and local conditions.